The osmotic response in the yeast is mediated in part by the HOG1 MAP kinase cascade, a signal transduction pathway whose activity is regulated by members of the two-component signal transduction family. Sln1p is a plasma-membrane localized two-component sensor-kinase that autophosphorylates on a conserved histidine upon stimulation. The Sln1p phosphoryl group is relayed to aspartyl and histidyl groups on sln1p and Ypd1p respectively and finally to aspartyl groups on the two response regulators, Ssk1p and Skn7p. The phosphorylation state of Ssk1p regulates HOG1 pathway activity, while Skn7p is a bifunctional transcription factorwhose phosphorylation state dictates whether osmotic response or oxidative response genes will be activated. Our isolation and characterization of a set of three s1nl* mutants that cause a constitutive kinase phenotype and activation of the Skn7p response regulator have focused our attention on various aspects of the SLN1-YPD1-SKN7 phosphorelay. In this proposal we discuss the molecular basis of Sln1 kinase activation, the details of signal propagation and the molecular basisfor regulation of Skn7p function by phosphorylation. The specific aims of this grant are: (1) to investigate the role of a cytoplasmic coiled-coil region in regulating Sln1 kinase activity using activating sln1* mutations and SLN1 chimeras as tools to dissect the process; (2) to investigate how thesln1p signal is propagated to the nucleus by careful analysis ofSkn7p and Ypd1p localization and by defining the cis-and trans-acting requirements for their localization; and (3) to investigate the molecular details of SLN1-SKN7 dependent transcriptional events by analysis of DNA and protein interaction with constitutive and non-phosphorylatable forms of the Skn7 protein. The power of genetics approaches has made the yeast S. cerevisiae an important model for the study of stress response. Regulation of the yeast osmotic stress pathway by a two-component type histidine kinase introduces added health implications since, given the restricted presence of two-component systems in lower eukaryotes and plants, the histidine kinase are an excellent potential anti-fungal drug target.